2

Chapter

The
Management
Environment

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Learning Outcomes
• Explain what the external environment is and
why it’s important.
• Discuss how the external environment affects
managers.
• Define what organizational culture is and why
it’s important.
• Describe how organizational culture affects
managers.

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2.1 Explain what the
external
environment is and
why it’s important.

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 External Environment
Factors, forces, situations, and events outside
the organization that affect its performance.

• Factors: Inflation, Unemployment, Pollution etc.

• Forces: Government, Law Enforcement Agencies etc.
• Situations: Un-Planned Activity or Happening
Supply warehouse caught fire, Labor Strike, etc.
• Events: Planned Activity
Elections, Budget Announcement, etc.

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Components of the External
Environment

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2.2 Discuss how the
external
environment affects
managers.

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How Does External Environment
Affect Managers?

• Jobs and employment

• Assessing environmental uncertainty
• Managing stakeholder relationships

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Assessing Environmental
Uncertainty

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Managing Stakeholder
Relationships

Stakeholders:
any constituencies in an organization’s
environment that are affected by that
organization’s decisions and actions.

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Organizational Stakeholders

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2.3 Define what
organizational
culture is and
explain why it’s
important.

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What is Organizational Culture?

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Organizational Culture

Shared values, principles, traditions,

and ways of doing things that influence the
way an organization’s members act.

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Culture is:

1. Perceived
2. Descriptive
3. Shared

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2.4 Describe how
organizational
culture affects
managers.

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How Does Organizational Culture
Affect Managers

• Effect on what employees do and how they

behave
• Effect on what managers do

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How Does Culture Affect What
Employees Do?
Strong cultures:
cultures in which the key values are deeply held
and widely shared.

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Strong Cultures Can:

• Substitute for formal rules and regulations

• Create predictability, orderliness, and consistency

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How Does Culture Affect What
Managers Do?

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Managerial Decisions Influenced by
Culture

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